Correlation Between Saule Technologies and MBank SA
Can any of the company-specific risk be diversified away by investing in both Saule Technologies and MBank SA at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Saule Technologies and MBank SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Saule Technologies SA and mBank SA, you can compare the effects of market volatilities on Saule Technologies and MBank SA and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Saule Technologies with a short position of MBank SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Saule Technologies and MBank SA.
Diversification Opportunities for Saule Technologies and MBank SA
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Saule and MBank is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Saule Technologies SA and mBank SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on mBank SA and Saule Technologies is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Saule Technologies SA are associated (or correlated) with MBank SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of mBank SA has no effect on the direction of Saule Technologies i.e., Saule Technologies and MBank SA go up and down completely randomly.
Pair Corralation between Saule Technologies and MBank SA
Assuming the 90 days trading horizon Saule Technologies SA is expected to generate 2.99 times more return on investment than MBank SA. However, Saule Technologies is 2.99 times more volatile than mBank SA. It trades about 0.39 of its potential returns per unit of risk. mBank SA is currently generating about 0.45 per unit of risk. If you would invest 122.00 in Saule Technologies SA on November 28, 2024 and sell it today you would earn a total of 79.00 from holding Saule Technologies SA or generate 64.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Saule Technologies SA vs. mBank SA
Performance |
| Timeline |
| Saule Technologies |
| mBank SA |
Saule Technologies and MBank SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Saule Technologies and MBank SA
The main advantage of trading using opposite Saule Technologies and MBank SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Saule Technologies position performs unexpectedly, MBank SA can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in MBank SA will offset losses from the drop in MBank SA's long position.| Saule Technologies vs. True Games Syndicate | Saule Technologies vs. Play2Chill SA | Saule Technologies vs. PLAYWAY SA | Saule Technologies vs. LSI Software SA |
| MBank SA vs. Road Studio SA | MBank SA vs. Noble Financials SA | MBank SA vs. LSI Software SA | MBank SA vs. GreenX Metals |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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